An organization sells 1,000 shares of its treasury stock at $15 per share previously acquired at $10 per share. Which of the following statements is true?
A.
The organization should record a $5,000 gain on sale of treasury stock
B.
The organization should record $15,000 as a debit to treasury stock
C.
The organization should record $5,000 as a credit to paid-in capital
D.
The organization should record a $10,000 debit to paid-capital account
When a company re-sells its treasury stock, the difference between the selling price and the cost at which it was originally acquired is recorded in the Paid-in Capital - Treasury Stock account, not as a gain or loss on the income statement.
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